4503 · Astellas Pharma

Will it survive?

• Can it pay its interest? 37.1×
  Comfortable
  Operating income ¥382.6B ÷ interest expense ¥10.3B
  What this means

  Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.

• How heavy is the debt, net of cash? ¥284.3B · 0.7× operating profit
  Modest net debt
  Cash ¥281.6B − debt ¥566.0B
  What this means

  Netting ¥281.6B of cash and short-term investments against ¥566.0B of debt leaves ¥284.3B owed, about 0.7× a year's operating profit (1.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital 9%
  Solid through the cycle
  10-yr median, range 1%–15%; 14% latest = NOPAT ¥302.3B ÷ invested capital ¥2.11T
  Industry peers: median 17%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 14% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 18%
  High through the cycle
  9-yr median margin, range 8%–23%; latest ¥502.5B = operating cash ¥560.2B − maintenance capex ¥57.7B
  Industry peers: median 14%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 23% of revenue this year, a 18% median across 9 years.

• Are earnings backed by cash? 1.92×
  Cash-backed
  Cash from ops ¥560.2B ÷ net income ¥291.5B
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 28%
  Reinvests most of it
  Dividends + buybacks ¥138.2B ÷ Owner Earnings ¥502.5B — this fiscal year
  What this means

  Of ¥502.5B Owner Earnings, ¥138.2B (28%) went back to shareholders, ¥137.5B dividends, ¥730M buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does. This year's proportion is 28%; across the record (2018–2026) it is 59%, the capital-allocation section below.

• Investing or harvesting? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Durability & moat, 2017–2026

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 10 of 10
  What this means

  Never lost money over the record, the earnings stability Graham insisted on.

• Return on capital ≥ 15% 1 of 10 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 12% → 7% (3-yr avg ends)
  What this means

  The recent-years average (7%) sits below the early years (12%), but the latest year (18%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is 11% — read it across the cycle, not on the dip.

• Reinvestment, incremental ROIC −1%
  What this means

  Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.

• Owner earnings growth +3%/yr
  What this means

  Owner earnings grew about 3% a year over the record.

• Worst year 2017 · 1.2% op. margin
  What this means

  Stayed profitable even in its hardest year, the resilience that survives recessions.

• Share count −1.9%/yr
  What this means

  The share count is shrinking, buybacks are quietly growing your slice of the business.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.